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McDonald’s U.S. Operations in Trouble Despite Endless Marketing Schemes

by Carey Wedler, The Anti Media:

Despite McDonald’s extensive efforts to improve U.S. sales over the last several years, its most promising endeavor is coming up short — and as a result, so are the company’s domestic profits.

Reuters reports that according to McDonald’s fourth quarter report, released Monday, “Sales at established U.S. restaurants fell for the first time in six quarters as the novelty of all-day breakfast failed to overcome competition from supermarkets and other food sellers.”

McDonald’s previously bolstered profits by adding all-day breakfast to its menu in October 2014, a move directly intended to stimulate lagging sales.

These efforts were initially successful, but apparently not sufficient enough to constitute a prolonged increase in sales.

However, global sales have been more lucrative. “Sales crushed expectations with a 2.7% gain year-over-year for same-store sales, much higher than the expectations of 1.4% growth,” Business Insider notes.

McDonald’s made most of its gains internationally, and “revenue was just ahead of expectations at $6.03 billion against projections of $6.00 billion.” McDonald’s has made substantial investments in technology in some countries, including adding self-serve kiosks, which have helped their profits abroad.

Domestically, however, where McDonald’s establishments are most profitable, the company surprisingly blamed its decline, in part, on all-day breakfast, arguing it was a “’challenging comparison against the prior-year launch of the very successful All-Day Breakfast,’” according to Reuters.

According to Neil Saunders, head of retail analyst firm Consuming, efforts like adding all-day breakfast have, indeed, fallen short.

“These changes were supposed to drive a steady and sustainable uplift in (consumer) spending rather than a one-off spike in sales, but it is increasingly clear that this strategy is not delivering,” he said in an email to Reuters.

However, other factors also contributed to the overall loss, which was admittedly .1% less than market analysts predicted. “Supermarkets have been passing lower food costs on to shoppers, while restaurants are raising menu prices to offset the impact of minimum wage increases,” Reuters notes.

While McDonald’s fourth quarter sales fell 1.3%, “fourth quarter revenue fell nearly 5 percent, to $6.03 billion.” However, this was “mainly due to the sale of restaurants to franchisees as part of Easterbrook’s turnaround plan.”

McDonald’s has made numerous efforts domestically and abroad to re-energize sales. From all-day breakfast and “healthy” salads in the U.S. to chocolate-drizzled fries in Japan, some of these efforts have worked. As the fourth quarter report notes, the company continues to perform well internationally, where it earns two-thirds of its profits.

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8 comments to McDonald’s U.S. Operations in Trouble Despite Endless Marketing Schemes

  • Troy

    My wife and I eat at 3 places only…one is a local Pizza place…been eating there since 1973, Chipotle…damn those chicken burrito’s are good, and also a local coffee/food joint which all their food is organic. McDonalds is just bad…bad quality food, its loaded with cancer causing chemicals…its all GMO. McDonalds has such a bad name, I’m not sure if they could rebound. Its kinda known as a Ghetto rat or trailer trash restaurant. Chipotle always has lines of people. I get a HUGE burrito at Chipotle for $6.50…not many places can fill your belly for that price…and its organic and non-GMO!!!

  • f16hoser

    Marketing won’t fix Horrible food. Can we call it food?

  • AgShaman

    Ugh…I think about all the filet-o-something I ate when I was a kid skippin school. Gross.

    If I had to fire up the WAG meter…I would say they never really recovered after Morgan Spurlock’s “30 Days Later”. It was pretty brutal, not that I care….I still watch it from time to time for laughs.

  • KRELL427

    How do you unwatch the pink slime chicken mcnuggets video ?

  • Steelerdude

    I had to wait for the car dealer to open, so I said “Im going to get a something quick here”. I walked into the mcdonalds, looked at the menu and “Good God…what am I doing and look at
    all that crappy food that cost so much”

    walked out and got a large coffee at am/pm….

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